KrasAir fights for third place

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KrasAir fights for third place
By Vovick Karnozov
AWN Moscow-based columnist

KrasAir last week declared its intention to become Russia's third largest passenger carrier (after Aeroflot and Pulkovo) on operational results of this year. In 1998, it occupied fifth place and fourth in 1999.

Last year KrasAir made nearly 6,000 flights with a total duration of 40,000 hours and carried over 0.763 million passengers and almost 20,000 tons of cargo.

KrasAir is a large company consisting of the airline with a fleet of 50 airplanes, the airport of Krasnoyarsk, the aircraft maintenance center and the ticket sales agency. The headquarters and main industrial facilities are located in Krasnoyarsk, a large city with population in excess of one million, one of largest cities in Siberia. KrasAir was established in 1993 as a result of de-nationalization of the Krasnoyarsk unitary state enterprise of civil aviation. Now it is a joint-stock company with 51% of shares in the state ownership.

In 1996-98 KrasAir, as many other regional carriers, had a period of decline caused by the decreasing solvent demand on the Russian market for air services. At that time many routes were closed and a good number of aircraft grounded. For KrasAir this period terminated in 1998, with a new team of managers headed by Boris Abramovich coming to power. Abramovich initiated a vast program for the airline revival with the focus on restoration of the fleet and increase in the number of scheduled lines flown.

During 1999 the number of flights increased from 20 to 41. In 2000, it is planned to open 12 more lines. These originate not only in Krasnoyarsk, but also in other airports, most notably Norilsk. The physical growth has been on account of more intensive work of the personnel and a higher utilization of the fleet. After several years of losses, in 1999 KrasAir became profitable.

Plans for this year include further increase in air traffic by re-opening regular services from Siberian airports and an intensive summer charter program from Moscow airports (mostly for tourists from Siberia flying to the capital on scheduled KrasAir flights).

In 2000, the volume of sales should rise from Rbs 1.8 billion to Rbs 3 billion. That would be a remarkable achievement, taking in account the fact that in 1999 the rise in the sales volume was twofold (to the respective level of the previous year). A good portion of growth should be generated by optimization of operational and associated expenses (the latter alone should increase profitability of one flight hour by 46%) and more intensive use of the fleet.

When Abramovich came to power, the airline had only a handful of planes in airworthy condition, while the others were grounded, needing service and maintenance. In 1999, Rbs 80 million was spent on fleet restoration, including the overhaul of 23 D-30 series engines at Rybinsk Motors and the purchase of 11 new NK-86 engines from the Kazan engine plant KMPO. Eighteen airliners came though a major overhaul for lifetime extension.

The most numerous airliner type, the Tupelov Tu-154, will remain the main one in KrasAir inventory in the foreseeable future. KrasAir owns 17 such aircraft, plus three more are hired from other operators. However, the other numerous aircraft type, the Il-62, is to be withdrawn shortly because its high fuel burn does not allow profitable operations.

The Il-62 will be replaced by the Tu-204 and Tu-214. This summer, KrasAir hopes to take delivery of its first Tu-204-100 new from Aviastar factory. The plane will fly to Moscow, Vladivostok, Sochi and other routes with a duration of more than five flight hours. A second Tu-204-100 is to follow by the end of the year. In part, funding for the Tu-204 acquisitions is provided by the Krasnoyarsk regional administration. In all, KrasAir plans to have a fleet of 10 Tu-204s. The company is also looking at the Tu-214, an improved Tu-204 with higher weight and range. For short routes, the An-140 is being considered as a replacement to the aging Yak-40s.

In 2000, Krasair accepted in service the Tu-134 twin jet with the intent to use it mostly in winter, when the 168-seat Tu-154 has problems with seat loads. In summer, KrasAir plans to have three Tu-134s, including two in a standard 76-seat cabin. The third plane, which has already been acquired, is a luxuriously furnished aircraft for VIP services. It began flying in early April.

KrasAir has big hopes concerning cross-polar routes linking Southeast Asia with the US via Russian and Chinese territories. The airport of Kransnoyarsk is one of the largest in the region, with a 3,700-m runway and modern airport equipment allowing ICAO Category 1 landings. The city has a number of large hotels with sufficient capacity to accommodate passengers of a Boeing 747 or Airbus A340 in the case such a plane performs an emergency landing.

Kransnoyarsk has a good chance of becoming the main airport in Siberia for stop-over or emergency landing for planes flying cross-polar routes. Formally, these routes are open for traffic, but a lack of ground infrastructure in the vast territories of Siberia retards the process of mastering commercial operations via the North Pole. KrasAir holds permission for flights to New York and Toronto via the Pole. In November 1998, the company performed its first commercial flight via the North Pole, from Krasnoyarsk via Khatanga to Cherill in Canada.